By Haggai Carmon

The U.S. government recently won a victory at the Tel Aviv, Israel Labor Court (by Judge Alya Fogel, president of the Court) when it denied a lawsuit by a former local employee for severance payment. The Court awarded the U.S. with costs.

Irena Shaikevitch worked for 19 years as a locally hired employee at the U.S. Embassy in Tel Aviv. During the most recent years of her employment, she was assigned to the American Citizens Services section at the Consulate. While conducting an investigation regarding visa fraud, the Embassy’s security officer suspected that Shaikevitch was divulging classified visa denial information to Mordechai Tzivin, a private attorney who had befriended her. During an interview with the security officer, Shaikevitch admitted she gave Tzivin such information. Subsequently she was separated from her employment for cause without customary severance payment.

Shaikevitch sued the United States at the Tel Aviv Regional Labor Court for severance payment, failure to give her prior notice, and personal damages. She also sought statutory punitive interest on the withheld payments: currently 515% annually.

Shaikevitch argued that her actions, to which she had admitted, do not justify her separation for cause without severance payment. She claimed that the U.S. should have applied less severe disciplinary actions against her.

The U.S. argued that Shaikevitch had been working in a sensitive environment that required a high degree of trust and integrity from its employees. The U.S. also argued that Shaikevitch admitted to grossly violating that trust when she gave sensitive information to an outsider, while using her co-workers in another department to obtain the information she needed. Therefore, the U.S. was justified in separating Shaikevitch for cause without severance payment.

The Court ruled that the U.S. was justified in separating Shaikevitch, by not giving her prior notice and by denying her severance payment. The Court ruled that by divulging classified visa information without any authorization from her supervisors, Shaikevitch created a potential criminal and security risk, in clear violation of the Embassy’s procedures. The Court indicated that Israel’s Severance Payment Law mandates the payment of severance to separated employees, unless the case falls under one of few exceptions. One of these exceptions is when the employee has engaged in fraud, theft or bribery. The Court found that although there were conflicting factual accounts regarding the volume of information divulged, as well as regarding the length of time during which Shaikevitch engaged in the information theft, her own admission was sufficient to establish that the U.S. was correct in separating Shaikevitch for cause without making any severance payment, due to the great severity of these acts.

In sum, the court denied Shaikevitch’s claim for severance payment and for damages incurred by the failure to give her advanced notice.

This is a case of first impression in Israel. Most similar cases concerned theft of tangible property, and none of them involved a foreign embassy. Furthermore, cases where the Court has completely justified a total denial of severance payment, are extremely rare.

The Court has ruled that embassy employees are held to a higher standard, and that their seniority operates against them in cases of breach of trust.

“Beyond the attempt of the plaintiff and Advocate Tzivin to justify their actions by using despicable terms, we are of the impression that these actions are particularly severe in view of the plaintiff’s place of work. We should make it clear that such conduct is unacceptable to the court in any workplace. However, the plaintiff’s place of work for almost two decades was at the American Embassy in the State of Israel – where a strict code of conduct is applied, which the plaintiff failed to follow. Therefore, the inappropriate manner of the plaintiff’s conduct is manifested even more strongly.”

The Court has also sent a strong message to other employees:

“Additionally we have weighed the plaintiff’s actions also by measuring the effect they could have on other employees at her workplace. We think that in a place where such serious events took place – against all procedures of the defendant, then the defendant’s reaction against the perpetrator was appropriate under the circumstances. Otherwise, the defendant’s employees could get the impression that the plaintiff’s acts were legitimate and their severity is not great.”

These statements are pivotal as a deterrent against recurrence of similar wrongdoing by embassies’ employees. The Court has adopted the U.S argument that embassy employees are held to a higher standard and that foreign embassies’ strict rules of conduct should be recognized and applied.

The Israeli Labor Courts are known for their disposition to favor employees. This is particularly true when the defendant is a powerful employer, such as a big corporation or a foreign State. Therefore, the U.S. victory in this case is particularly significant.

The U.S. government was represented by Haggai Carmon.